What to look for when Starbucks (SBUX) reports Q3 2024 earnings results

Shares of Starbucks Corporation (NASDAQ: SBUX) were down over 2% on Monday. The stock has dropped 12% over the past three months. The coffeehouse chain is scheduled to report its third quarter 2024 earnings results on Tuesday, July 30, after markets close. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $9.24 billion for Starbucks in Q3 2024. This compares to revenue of $9.16 billion reported in the same quarter a year ago. In the second quarter of 2024, revenues fell 2% year-over-year to $8.6 billion.

Earnings

The consensus estimate for EPS in Q3 2024 is $0.93. This compares to adjusted EPS of $1.00 reported in the year-ago period. In Q2 2024, adjusted EPS dropped 8% to $0.68.

Points to note

Starbucks has been facing some short-term headwinds which have persisted longer than expected. The company has been seeing slow traffic in the US, particularly with its occasional afternoon customers, and a slower-than-expected recovery in China. Against this backdrop, the coffee chain has been focusing on the factors it can control.

Starbucks is working on meeting its demand across dayparts, and improving customer experience through product innovation and expanding its digital capabilities. The morning daypart is the company’s peak time and it makes up half of its business. It is working on easing the challenges it faces in meeting this peak demand and helping customers with their orders.

Starbucks is rolling out new products in coffee, cold beverages and food to provide more options to customers. It is also working on expanding its digital capabilities to make it easier for customers to order and get their orders delivered on time. All these efforts can be expected to yield benefits for the company.

In China, despite a slow recovery, Starbucks continues to see long-term opportunity. It is seeing good returns on its stores and believes there is space for further expansion. In the US, the company sees opportunity for expansion in suburban and more rural areas.